By Lloyd Takawira
In a recent landmark ruling handed down by Chief Justice Luke Malaba, sitting with Justices Susan Mavangira and Nicholas Mathonsi the Supreme Court ruled that all debts incurred before February 22 last year must be settled in the local currency at a 1:1 rate against the US dollar.
The ruling according to the appeals court is in line with Statutory Instrument “SI”33 of 2019 which abolished the multi-currency system making the RTGS the countrys sole legal tender.
The ruling emanates from an appeal case involving Zambezi Gas Zimbabwe (Pvt) Limited against mining services provider N.R. Barber (Pvt) Ltd and the Sherriff of Zimbabwe.
Chief Justice Malaba ruled that the payment of RTGS$4 136 806,54 made by Zambezi Gas was in full and final settlement of the debt in terms of Section 4(1) (d).
Chief Justice Malaba went on to quash arguments by N.R. Barber which he said were devoid of merit.
“Counsel (N.R Barber lawyer) would like the court to believe that a conversion of a foreign currency denomination to a local currency denomination amounts to a lesser value in the local currency,” he said.
“This reasoning is wrong at law. There can be no parity to talk about once it is accepted that the RTGS dollar is a currency denomination with a set legal value.
“It is the legal tender used in Zimbabwe and as such carries a specific value. Once a conversion of the value of an asset or liability denominated in United States dollars is made to the value of RTGS dollars, the converted value remains the same” Chief Justice Luke Malaba said
However legal and political analysts expressed strong reservations over the ruling .
Political commentator Mr Frank Chauke said “the ruling is a huge blow to the business community , take for example this case in point , a reduction in an asset from US$3.8 million to US$144,000 is by all accounts a serious violation of one’s private property rights”
Another political analyst Mr Malcom Ziki said ” the Supreme Court has upheld the validity of a controversial government decree .
In simpler terms Zimbabwean government being the biggest debtor has reduced debt by theft ”
Lawyer Sipho Malunga writing on Twitter: ” …who has access to massive debt in Zimbabwe except the political elite? This benefits them and only them. What serious investor would invest in such a country?”
Legal expert, Dr Alex Magaisa questioned how the RTGS dollar can have the same value with the US dollar.
“Is the ivory tower of justice so divorced from the economic realities so as to produce such esoteric comments from the country’s leading justice?”